Meet the cheap forefront ETF that crushes the S&P 500 (again) in 2025

Google Services, including YouTube advertisements, Google Search, Google Network, Google subscriptions, platforms and devices, earned $ 304.93 billion in 2024 turnover and $ 121.27 billion in business income for an operational margin of 39.8%.

This does not even take Google Cloud into account, the fastest growing segment from Alphabet with income. However, the segment is currently low margin because alphabet investment dollars pour in the construction capacity to keep Amazon Web Services and Microsoft Azure.

For comparison: the family of Apps from Meta Platforms (Instagram, Facebook, WhatsApp, etc.) earned $ 164.5 billion in 2024 turnover and $ 87.1 billion in business income – for an operational margin of 53%.

Alphabet and Meta have such high margins because of the capital light character of their advertising company models. Netflix, Disney and Comcast spend billions every year on producing content. Telecom companies must invest in and maintain physical infrastructure and customer service programs.

Alphabet and Meta do not have high operating costs, so they can convert more converts in profit. The most important costs are work and maintain their platforms. Content makers on YouTube and Instagram essentially do the work for them. It is a completely different business model than trying to produce content in the Hope public that it receives well.

With high margins, both companies can support mass research and development programs, buy back shares and pay (from last year) dividends. In 2025, Meta will invest $ 65 billion in capital expenditure (Capex) – mainly on artificial intelligence (AI) – to stimulate involvement on its platforms and enable advertisers to conduct more precise campaigns. The (very unprofitable) Reality Labs division invests in virtual and augmented reality software and hardware. But again, Meta can pay these investments because the advertisement business is so strong.

Alphabet has embedded AI functionality in Google Search and scales the cloud infrastructure. It predicts a stunning $ 75 billion in Capex 2025. Despite countless benefits, alphabet has a ratio for the forward price win (p/e) of only 20.4, compared to 28.4 for metable lines. However, the advertising company from Meta is growing faster and is demonstrably better than that of alphabet, so the premium appreciation is logical.

Nevertheless, both shares have lower forward p/es than many other mega-cap-technical names. And that is factoring in the enormous profit of Meta in the past three years.

Investing in the communication sector is a large gamble on alphabet and meta platforms, which is why the majority of this discussion is aimed around those two shares. Despite the outperformance of the sector in 2024, and so far in 2025, both shares have reasonable ratings and strong growth views, which suggests that they would still be both worth it to be worth it now.

As long as both shares continue to make a strong profit, the Vanguard Communication Services ETF can continue to surpass the S&P 500. The ETF is a good gamble if you are interested in alphabet and meta and some diversification outside those two shares. The ETF has a yield of 1% and a ratio of 23 p/e. That is much cheaper than other growth -oriented ETFs, such as the Vanguard Information Technology ETF, which has a 38.5 p/e and only a yield of 0.6%.

However, if you are looking for a variety of mega-cap growth shares without the limitations associated with investing in shares in a certain sector, it may be worth taking the look Vanguard Growth ETF or the Vanguard Mega Cap Growth ETF.

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• Nvidia: If you invested $ 1,000 when we doubled in 2009, You would have $ 348,579!**

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At the moment we are publishing “Double Down” warnings for three incredible companies, and there may not be a different chance soon.

Go on “

*Stock Advisor Return on February 21, 2025

John Mackey, former CEO of Whole Foods Market, a subsidiary of Amazon, is a member of the board of directors of the Motley Fool. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and Sister of Meta Platforms CEO Mark Zuckerberg, is a member of the Motley Fool’s Board of Directors. Suzanne Frey, a director of Alphabet, is a member of the board of directors of the Motley Fool. JPMorgan Chase is an advertising partner of Motley Fool Money. Daniel Foelber has positions in Caterpillar and Walt Disney and has the following options: short March 2025 $ 115 calls on Walt Disney. The Motley Fool Has Positions in and Recommends Alphabet, Amazon, American Tower, Apple, Berkshire Hathaway, Chevron, Costco Wholesale, JPMorgan Chase, Linde, Meta Platforms, Microsoft, Netflix, Nextera, oracle, oracle, oracle,, Salidia,,,,,,,,,,,,,,,,,,,,,,,,,, nvidia. ,, ” Tesla, Vanguard Index Funds-Vervard Growth ETF, Vanguard Real Estate ETF, Walmart and Walt Disney. The Motley Fool recommends Broadcom, Comcast, Constellation Energy, Ge Aerospace, Sherwin-Williams, T-Mobile US, UnitedHealth Group and Verizon Communications and recommends the following options: Lang January 2026 $ 180 calls on American Tower, Lang January 2026 $ 395 Calls Onge Microsoft, Lang January 2026 $ 90 Calls on Prologis, short January 2026 $ 185 calls on American Tower and short January 2026 $ 405 calls on Microsoft. The Motley Fool has a disclosure policy.

Meet the cheap Vanguard ETF that crushes the S&P 500 (again) in 2025, was originally published by De Motley Fool